A leading Cambodian newspaper reported Monday that the U.S. Embassy in Phnom Penh knew that a prominent anti-trafficking activist had lied about her background, and suspected that one of her non-profits had been mismanaging funds. And yet, the story makes clear, the U.S. Embassy chose not to act.

The Phnom Penh Post newspaper said Monday that the U.S. Embassy in the Cambodian capital knew for years that disgraced anti-trafficking activist Somaly Mam had engaged in deceptive practices.

The embassy also suspected that local non-profit AFESIP – which operates shelters in Cambodia for victims of sex trafficking, and which Somaly Mam co-founded in 1996 – had “mismanaged” its funding.

Additionally the embassy was also aware that the quality of medical and psychological care at the shelters AFESIP operates was woefully inadequate, a lack of support that had led “many unnamed interns and staff” at the non-profit to resign.

Despite that, the embassy chose to ignore the allegations on the grounds that to act could undermine funding for other anti-trafficking organizations and harm those already in AFESIP’s care.

The Phnom Penh Post article was based for the most part on a May 2012 embassy cable that the newspaper obtained after filing a Freedom of Information Act request with the U.S. government.

The cable – titled "Somaly Mam Under Microscope," which the newspaper shared with VOA – sheds light into the reasoning behind the embassy’s ongoing support for the activist, despite knowing about a litany of significant problems.

Somaly Mam, the cable noted, was, “a positive force in the anti-trafficking effort” and “an effective and far-reaching spokesperson who has raised awareness and significant funding for anti-[trafficking] interventions.”

It went on to state that: “Although there are concerns that the funding may be mismanaged and that AFESIP’s shelters may be lacking in quality care, Somaly Mam’s efforts still represent a positive alternative to the severe sexual abuse victims would otherwise be facing.”

On the subject of medical care, sources told the embassy that: “[V]ictims resident in AFESIP shelters had access to psychological care only once every three months, even in cases of extreme need.”

It added: “The shelter staff was also reportedly unable to respond to emergency medical situations, even at the most basic level.”

The cable makes clear that embassy staff were aware of the allegations against Somaly Mam and the risk to U.S. taxpayers’ money of mismanagement, yet chose not to act.

A U.S. Embassy spokesman who spoke to VOA declined to comment on the contents of the cable, the Phnom Penh Post’s story or whether staff working at the embassy had a responsibility in this instance to protect U.S. taxpayers’ money.

Somaly Mam was for years a leading figure in international efforts to combat sex trafficking. In 2009, the U.S.-based news publication Time magazine named her one of the world’s 100 most influential people. Three years earlier, the cable news channel CNN listed her as one of its heroes.

Her eponymous U.S.-based non-profit, the Somaly Mam Foundation, raised millions for AFESIP, and has long been a favorite with American celebrities such as actress Susan Sarandon and Facebook’s Chief Operating Officer Sheryl Sandberg.

But in recent years, a string of media reports raised doubts about the stories told by some of the women her foundation put forward as sex trafficking victims. More recently, questions were asked about some of the truths behind Somaly Mam’s own well-publicized story as a victim of sex trafficking.

The reports initially ran in 2012 and 2013 in the Cambodia Daily, an English-language newspaper, and last year in Newsweek.

The Newsweek report finally prompted the Somaly Mam Foundation to conduct an investigation. Shortly afterwards, Somaly Mam was forced to step down. In September the Foundation shuttered its doors.

Undeterred, Somaly Mam founded the New Somaly Mam Fund late last year to replace the defunct foundation’s fundraising efforts.

Yet controversy continues to swirl around Somaly Mam, not least because she regularly posts images of her visits to AFESIP’s shelters in which the women and girls are identifiable.

And over the weekend, the Phnom Penh Post reported that the New Somaly Fund’s business document listed several well-respected Cambodian non-profits as partners. But when contacted by the newspaper, the non-profits denied any knowledge of the purported arrangement.

VOA was unable to reach Somaly Mam for comment.

AFESIP’s program director, Sao Chhoeurth, hung up on VOA on Monday claiming he had not seen the Post’s article and saying he was unable to comment on allegations of the misuse of funds as it was a public holiday.

The Somaly Mam Foundation was established in 2007 to combat the trafficking and sexual exploitation of women and girls in Southeast Asia and has, since then, raised the profile of the issue.

But over the years, some of the claims made by Somaly Mam raised eyebrows, as did the organization’s use of alleged victims of sex trafficking to raise awareness and funds. Its decision to allow New York Times journalist Nicholas Kristof to live-tweet a brothel raid in Cambodia in 2011 was also sharply criticized.